We continued to characterize clathrin assembly protein 3 (AP3) as a PLD inhibitor. In order to localize the region responsible for the PLD inhibition, AP3 was subjected to limited digestion to generate a mixture of 30-, 33-, and 58- kDa fragments. The inhibitory activity correlated with the elution profile of the 33- kDa protein. The sequences of NH2- terminal 12 residues of the 30- and 33- kDa proteins were the same as the NH2- terminal sequence of AP3. These results suggest that the NH2- terminal 33- kDa contains the region required for PLD inhibition and its COOH- terminal 3-kDa region might be critical for interaction with PLD1. To further delineate the AP3 sequence involved in hPLD1 inhibition, we prepared GST fusion proteins containing the NH2-terminal 289 amino acid residues [AP3(1-289)], NH2- terminal 320 residues [AP3(1- 320)], or COOH- terminal 595 residues [AP3 (321-915)] and tested their abilities to inhibit PLD1. GST, AP3(1-320) was nearly as potent as AP3, whereas GST- AP3 (321-915) and GST- AP3(1-289) had almost no effect. It appears, therefore, that NH2- terminal 320 residues but not COOH- terminal 576 of AP3 is important for interaction with hPLD and that the sequence extending from residues Pro- 290 to Lys- 320 of AP3 is critical for the interaction. The GST fusion proteins were also tested for the ability to bind PLD1 by incubation with hPLD1, followed by precipitation with glutathione- Sepharose 4B beads and immunoblot analysis of PLD1in precipitate and supernatant fractions. The ability of GST- AP3 and GST- AP3(1-320) coupled with the inability of GST- AP3(321-915), GST- AP3(1-289), and GST to retain hPLD1 in the precipitate support the notion that the sequence extending from residues Pro-290 to Lys- 320 of AP3 is involved in interaction with PLD1. The fact that AP3 is a synapse- specific protein indicates that the AP3-dependent inhibition of PLD might play a regulatory role that is restricted to the rapid cycling of synaptic vesicles.